Open source securities recently released urban construction design (01599.HK) coverage report for the first time, giving a buy rating.
The summary of the research report is shown below:
The leader in the field of rail transit design consulting, the double main industries of design and engineering are developing together, giving a "buy" rating.
As a leader in the field of urban rail transit design and consultation, urban construction design will benefit from the dividend of urban rail development for a long time by persisting in expanding design consultation, strengthening project general contracting and actively expanding new business. The amount of the contract exceeds 28 billion yuan, and the follow-up performance release is expected. We predict that the return net profit of the company from 2023 to 2025 is 11.57,13.73,1.667 billion yuan respectively, corresponding to EPS 0.86,1.02,1.24 yuan, the current stock price corresponding to PE is 2.3,1.9,1.6 times, covering for the first time and giving "buy" rating.
The development prospect of urban rail transit is clear, and the number of successful projects ranks first in the industry.
The China Urban Rail Transit Association predicts that the scale of urban rail transit operating lines will be close to 13000 kilometers in 2025, and the number of operating cities is expected to exceed 60. The rail transit design industry is characterized by high market concentration and obvious head effect. In the past six years, the number of successful bidders of the first seven enterprises accounted for about 89%. By the end of 2022, urban construction and development has undertaken the overall design task of more than 40 cities and 197 urban rail transit lines in China, and the mileage has reached 2274 km, accounting for 20% of the total mileage opened in the country. The first rail transit line in 38 cities at home and abroad has been designed. In 2022, the company won 9 overall design projects in 8 cities such as Beijing, Shijiazhuang and Chongqing, and the winning number ranked first in the industry. by the end of 2022, the contract amount of the company's design, survey and consultation was 16.721 billion yuan, and the order on hand was sufficient.
Make every effort to promote the expansion of engineering construction market and actively promote the development of diversified business
As the main body of the first subway construction in China, the company has a leading advantage in the rail transit construction industry. The newly signed contracts of the company's engineering contracting plate in 2021 and 2022 were 228.7 and 3.48 billion yuan respectively. In 2022, construction projects such as Beijing Line 3, Line 6 South extension and Line 13 split were won. Beijing New Airport Line, Guangzhou Line 10 and other projects won supplementary contracts, expanding the general contracting business of Beijing existing line vehicle depot and subway flood control and drainage construction, and the rapid expansion of the project construction market. At the same time, the company has a high-end investment and financing think tank, diversified investment and financing channels, rich investment and financing experience, has a 30-year franchise of Kunming Metro Line 4, and most of the rail transit PPP projects involved in the implementation have entered the operation return period to obtain stable business income.
Risk Tips:Competition in the industry intensified and new orders fell short of expectations.